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Permalink Reply by Molly Phillips on March 19, 2015 at 3:55pm

Gateway Royalty is another royalty buyer in the Utica.  You probably could get a quote from them as well.  Their number is 330-627-4200.  Good luck to you.

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Permalink Reply by nc man on March 20, 2015 at 12:41am

Thank you, Molly! Appreciate your help! Will do!

nc man

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Permalink Reply by Billy Park Whyde on March 20, 2015 at 1:14am

   I might be reading this wrong but it appears you are leased and you received $5,000 an acre. I recall many here at GMS was waiting for the Ice Cream truck to show up, nervous and anticipating. In one case grandpa holding his granddaughter with bad health that he would buy her a pony if she got better. Many never had a chance at a lease which at the way CHK operates they may have been blessed. 

   Ah back then we were pretty much naive and innocent too bad the O&G companies couldn't have kept it simple to the enjoyment of all.

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Permalink Reply by nc man on March 20, 2015 at 2:04am

Billy,

If I am understanding your thoughts, you are so right but what would you have done?  One doesn't have any knowledge as to what is happening with/to others and what was promised to them. Counting your $ before it is in your hand is not the wisest thing to do, either.

This was a BIG surprise to us and hard to turn down. I pray we have shared enough of our good fortune with others less fortunate. We have tried.

I wish the ones you are referring to would have been blessed as we were. Now, some of us just want what is fair and get out of the O&G companies paths of wrath, that I have read about on this site and in your words! All we want is to sell and receive what we feel is fair and not look back! 

nc man 

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Permalink Reply by Steven A Joliat on March 20, 2015 at 2:51am

It is difficult for a landowner to determine the value of their minerals without professional help.  However, in Ohio using the ODNR Division of Oil & Gas Resources Management website someone can begin to see what nearby wells are producing.  If you are fortunate enough to be surrounded by wells with over a year to 18 months of production reports, you can begin to develop  a very rough idea of what the overall revenue may be for wells by multiplying the volume with reported sales prices.  The Wall Street Journal and other sources like the Ohio Oil and Gas Association www.ooga.org report regional as well as Nymex pricing.  Production in years beyond 2-3 is a wild guess, but it may settle at anywhere between 10% to 25% of the first year's production or perhaps less.  Try calculating the revenue for 5-10 years and multiply this figure by your royalty percentage multiplied by your acreage owned as a fraction of a 640 or 1280 acre unit.  Remember that there may be up to 8 wells in a unit, though it would probably take 5 years or so to drill and complete all of them.

If this doesn't make your head hurt too much, you are on your way to knowing what you have to sell.  For some of the attractive areas in Ohio, I'm assuming that it works out to values well in excess of $20,000 per acre.  This figure will probably get most if not all royalty buyers to hang up the phone though.  There are a lot of other factors they use to arrive at their offers.  I am not a petroleum engineer or other professional who is skilled at property valuation, so take this thread with a large grain of salt.  Your results may be significantly different from this exercise.

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Permalink Reply by nc man on March 20, 2015 at 4:33am

Steven,

Thank you for the info!

Yes,I am dizzy and my head is spinning but yours must be, too, from just writing this to me! Yes, there is much to be considered and it will take time to investigate and then ponder the right way to go.

I am under no pressure to sell but would like to, if a fair price is presented to me! I know I must do my homework but will admit I am very naive in the area of the O/G enterprise. Honestly, have just been going on what others write, on the Marcellus.com site, pertaining to their $ offers, on selling their mineral rights.

We no longer own the land. I inherited the mineral rights from my Dad. He sold the 80+ acres back in the 60's. It is located in n.e. Guernsey County., Londonderry Twp.( near the border of Harrison and Belmont county).

I own a 1/3 of the mineral rights.  I will read and re-read your words and see if I follow directions well!

I really appreciate you taking your time out for me and sharing with others on this site that might consider your suggestions.

nc man

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Permalink Reply by Billy Park Whyde on March 20, 2015 at 12:02pm

   NC a few years ago I would have been like many of the people that were present here. As I have been in the patch  I have seen the results of the influx of money from bonuses in the boonies in WV and Ohio. A new barn, a tractor, home improvements to even a new home, possible college for their children.

   I feel feel depressed when  I see politicians try to take from them, when the same politicians wouldn't give a sincere hello to them  much less anything else.  I wonder as to why lobbyist have the absolute power to control wealth and the citizens have no say.

 Today I would be hesitant in signing a lease as here at GMS it seems as if a lease is a license to steal. But the issue of forced pooling just says legalizes theft.

 Wish ya well NC.

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Permalink Reply by Harry E. Rose on March 20, 2015 at 12:57pm

BPW Well said.

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Permalink Reply by old trapper on March 20, 2015 at 1:59am

NC man ;

Once you sell the apple tree you will not get any apples ! Hang in there if you can ? Good luck.

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Permalink Reply by nc man on March 20, 2015 at 4:33am

I get 'ya! Thanks!

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Permalink Reply by Werner Kostendt on March 20, 2015 at 11:06am

On the other hand, that tree might not produce.

Iran could start exporting oil driving prices down further.  New drilling technology could release so much oil and gas prices could plummet by 99% like they did when drilling mud was first used in Texas.  Look up Spindletop.  Or maybe a Democrat gets elected Governor in Ohio and hydraulic fracturing is banned entirely.  Look at New York State.  How much are their oil and gas rights worth in the Empire State.

Or your site has bad geology or some other oil patch is discovered that is a lot easier to drill.   Or they drill and its a dry hole.  Or they drill your neighbors first and the results are disappointing.

Or you might grow old waiting for them to drill and have a big headache to leave to your estate.  There is the time value of money.  What is the present value of $1 today worth to you compared to one 10, 15, 20 years from now if they don't start drilling for that long.

Then there are taxes to consider.  Selling mineral rights for a profit is a gain... lease bonuses and royalties are ordinary income taxed at your top rate.  Or you can avoid taxes altogether if you sell by doing a tax free exchange.  I think any real estate qualifies as a like kind exchange for sale of mineral rights. 

The oil and gas rights brokers have a million good reasons to take your money and run now.  Some people vow to never sell, because you or your heirs will never get that fruit from that apple tree.

You could sell a half interest and have your cake and eat  it too.   At least two halves of it.

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Permalink Reply by Robert Bauer on March 20, 2015 at 11:37am

Dorado works in conjunction with AEUM.  Tom Aiten, manager of AEUM, has done several deals using them in the field, Dorado providing the land team and AEUM funding the transaction.  I have seen before in Monroe County where Dorado was buying minerals for AEUM and had sent out similar letters, almost like a stalking horse bid, then AEUM comes in with a better offer, the offer they were intending to make in the first place but still pick up low hanging fruit with the Dorado offer.  Not speculating on this, personally and professionally know the parties involved   

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